Estate Planning: The Basics Of An Estate Plan
Estate Planning: The Basics Of An Estate Plan
The process of estate planning can be a little bit too overwhelming for some people. They don’t know when and how to start planning. Hence, many are lost and confused.
With the help of this article, you will be equipped with the basics of an estate plan.
What Is An Estate Planning Attorney?
An estate planning lawyer focuses to help people plan the distribution of their assets when the time of their passing arrives. Estate planning lawyers educate you on the laws regarding the management of your estate, including distribution, probate, and estate taxes.
Here are other tasks an estate planning attorney can help you with:
- Helping in the preparation of your will.
- Establishing a power of attorney for you.
- Helping you assign a medical directive.
- Assisting in setting up your trust.
- Working with financial advisors.
- Determining ways to avoid probate.
The Basics Of Estate Planning
Creating an estate plan may sound complicated, but it can be less stressful with the proper guidance. Here are the estate planning basics to help you navigate through its process better.
Estate Planning Documents In Florida
The following documents are necessary when planning your estate in Florida:
- Will – A will or last will and testament is a document that details how you want your property to be distributed at the time of your death.
- Power of attorney – This document bestows the legal rights to a person chosen by the principal, or the maker of the POA, to make decisions or act on their behalf.
- Directive on health/medical care – This document gives permission to someone chosen by the decedent to make decisions in terms of medical care when they become incapacitated to do so.
- Living will – Contrary to the last will and testament, this documents the decedent’s wishes for his life-sustaining medical procedures.
- Guardian declaration – An individual can choose a guardian or a trusted person who will take care of their minor children.
Benefits Of Estate Planning
Estate planning has various benefits. Through it, you can freely live without worrying about your family if something unexpected happens to you. Here are some of the benefits of estate planning.
Estate Planning Can Provide For Your Family
One of the primary benefits of planning your estate is knowing that you can still take care of your family even if you’re not around anymore.
You give them rights to what you’ve earned throughout your life. More so, you can be assured that they can still enjoy the same standard of living they have at the moment.
It Helps Protect Your Children
Creating an estate plan ensures that your children are protected if something unfortunate happens. Through estate planning, you can easily appoint a legal guardian, establish financial wishes, and leave important instructions to protect them.
Estate Planning Avoids Delays In The Distribution Of Assets
If the properties in your estate undergo probate, your family can experience delays before they can get a hold of your properties. This can be very stressful for them as they will be needing funds for funeral services and other expenses.
Creating an estate plan avoids this scenario. Estate planning helps to speed up the process of distribution and eliminates its delay.
It Can Be Used In Times Of Your Incapacity
Estate planning is not only intended to prepare for someone’s passing. It can also help when you become incapacitated. For example, if you had an accident and you’ve been in a coma for a long time— who will take care of your assets?
Creating an estate plan allows you to designate someone you truly trust to manage your assets when you become incapacitated.
Estate Planning Allows You To Donate To A Charity
If you want to help people through your estate, you can donate a piece of it to your chosen charity through estate planning.
Tools In Estate Planning
Here are the five basic tools involved in estate planning.
A will is a document that presents how you wish your assets to be distributed among your beneficiaries. Normally, a will includes your assets, beneficiaries, appointed legal guardian, appointed executor, and the charity you want to donate to.
If you have a more complex financial standing, you may include setting up a trust aside from your will.
A trust is an arrangement that will take care of the distribution of your assets in the future. The trust will manage your assets during your lifetime and ensure that they get distributed later on.
Some of the uses of trusts include the transfer of assets without the need for probate, the reduction of estate tax liabilities, and providing ongoing income to your family.
Power Of Attorney
A power of attorney has two general uses. First, financial powers of attorney authorize them to create decisions when it comes to your finances. When you become incapacitated, they will be deciding who will handle your affairs.
Another use of a power of attorney is for health care and treatment. This is also known as health care powers of attorney.
Through life insurance proceeds, you can be assured that your family can cope with financial strain. It can help them sustain their standard of living and pay for funeral and settling expenses.
Life insurance proceeds are generally non-taxable, so you don’t have to worry about it being reduced.
Estate Planning Frequently Asked Questions
Here are answers to some of the most frequently asked questions pertaining to estate planning.
What Is Probate?
One of the legal processes conducted as part of the property administration of a deceased individual is probate. In a probate court, there are three main objectives.
The first is to determine the heirs who shall have the rights to the property. Such heirs will be determined based on the will left by the decedent or based on intestacy laws if the decedent left no will.
The second objective is to make sure that the creditors of the decedent are paid. The payment shall come from the decedent’s estate.
The third objective is the legal transfer of the title of the properties to their rightful heirs.
What Is The Role Of A Personal Representative Of A Decedent?
A decedent can select their personal representative through their will. A personal representative manages the administration of the estate. In fact, the first procedure in probate is the personal representative appointment.
What Is Estate Tax?
An estate tax is the amount of tax imposed on the decedent’s right to transfer property subject to distribution at the time of their death. The amount of estate tax will vary based on the total amount of the decedent’s gross estate. In Florida, estate taxes were abolished in 2004. However, federal taxes may still be imposed on the property.
Is Making A Will Really Necessary?
Most people think that wills are only for individuals who have plenty of properties. However, a will is created to protect not only what you have earned throughout your life, but also to protect your loved ones. If you die without making your will, you instantly leave the decision of distributing your wealth to probate courts.
Drafting a will is essential since the court’s decisions may be different from how you prefer to distribute your assets.
What Is A Revocable Trust?
A revocable trust is an estate planning tool that is commonly used alongside a will. Unlike a will, properties in a revocable trust are not subject to probate proceedings. Revocable trusts also take effect upon their creation, while a will takes effect upon the decedent’s death.
The trustor can make changes in the trust while they are of sound mind. This includes investments, changing beneficiaries, and taking care of the properties until the end of the decedent’s life.
Setting up a trust generally involves three parties, namely, the trustor, the trustee, and the beneficiary. The trustor is the person that creates the trust or the one who owns the properties.
They are also responsible for selecting at least one trustee who shall be responsible for managing the trust. The trustor will also determine at least one beneficiary of the trust, who shall receive the properties upon the decedent’s death.
The Estate Plan
The Estate Plan is a law firm composed of experienced and competent lawyers based in Coral Gables FL. They offer services on estate planning, litigation, and administration.
The Estate Plan’s services include the creation of a will, assisting in setting up a trust, preparation of paperwork, and ensuring that all requirements are complete. Other estate planning services include the creation of living wills, assisting in the designation of health care surrogates, and preparation of the power of attorney documents.
The firm’s goal is to ensure the fulfillment of its clients’ wishes through effective estate planning. They understand your situation and provide you with a comprehensive plan that will best suit it. If you need help in planning your estate, visit The Estate Plan now.
Have questions about how to get started on your estate plan or estate needs?
Have questions about how to get started
on your estate plan or estate needs?
Contact the experienced estate planning professionals at The Estate Plan
by calling us at (305) 677-8489.
Contact the experienced estate planning professionals at The Estate Plan by calling us at